Hyundai IPO: How will the proposed largest IPO in India impact rival Maruti Suzuki?
Also Read: Auto Q3 Result Review: Expect positive momentum to sustain, says Nuvama; picks Hero Moto, M&M, Minda The fundraising by Hyundai would put the valuation of its Indian operation at more than half its market capitalisation of around $47 billion in Seoul, the report added. Some domestic Indian investment banks are also likely to be appointed for the IPO in coming months.
Hyundai India sold 6.02 lakh vehicles in 2023, its highest-ever annual domestic sales in India, registering a growth of 9% over the previous year. The company’s export rose by 10% to 1.63 lakh units compared to 1.48 lakh units a year ago.
Meanwhile, during the past 12-18 months, India’s largest passenger car manufacturer Maruti Suzuki reported around 40 bps market-share gains YoY in FY24YTD, led by healthy response to its SUV launches (particularly the new Brezza, Grand Vitara and Fronx). Hyundai Motors India is the second largest passenger vehicle (PV) OEM with 14.9% FY24YTD market share, at $22- 28 billion valuation, analysts said.
Such valuation offers up to around upside risk to Maruti Suzuki shares based on various scenarios for valuations and discounts (at par or at 20% discount to Hyundai). “We believe Maruti Suzuki India could trade at similar valuations as Hyundai, amid Suzuki’s large India dependence and Toyota’s support/alliance, offset by Hyundai’s strong global standing and premium positioning," Emkay Global Financial Services said.
Potential small-car recovery and Maruti Suzuki’s E-SUV launch in October 2024 (industry’s firstborn EV launch) are added upside risks, it added. However, post the recent run-up in Maruti Suzuki share price, the brokerage assigned a ‘Reduce’ rating versus ‘Add’ earlier, with an unchanged target price of
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